The COVID-19 pandemic forced several key economic sectors to take a rapid digital turn, including financial institutions. This unexpected change came with its fair share of challenges. Still, entire industries quickly moved their operations online, adapted to remote work, and reinvented their activities for the new digital requirements of pandemic life.
Banking customers were already familiar with some digital banking services pre-pandemic: for example, e-transfers of various kinds had become a staple of our daily lives well before contactless payments became an absolute necessity because of COVID-19. The global pandemic helped further digitize the financial sector. However, the work is far from done – Banks and credit unions need to push to harness new technologies and reach a level of automation and personalization that will make them truly stand out.
What are the digital banking innovations that will enable this shift? Here are a few key examples to look out for:
Chatbots
Chatbots have been around for a few years and are increasingly popular in a variety of industries. The most obvious advantage of a chatbot is its 24/7 availability for customer support, but it can also cut costs while improving the customer’s experience by responding to simple queries on the spot. This eliminates potential frustrations such as being put on hold or waiting to hear back by email for a small issue that the customer feels could be fixed right away.
While they are not breaking news anymore, chatbots’ rise in popularity is far from over, especially with the increased versatility cutting-edge AI chatbots offer. Their future lies in their uses beyond simple customer service. Indeed, they have significant potential when used as smart assistants to the sign-up process or digital financial advisors.
AI
The potential offered by AI for banks and credit unions is huge. Capitalizing on the possibilities offered by AI tools, whether customer-facing or in the back-end, will be key for financial institutions in the coming years. They have several possible uses and, like chatbots, have already been introduced to the sector.
AI can help financial institutions meet new customer expectations for increasingly personalized services by analyzing data and tailoring the sign-up experience to each individual customer. It can also be used to offer automated financial recommendations. Robo-advisors are all the rage with self-directed investment apps.
AI tools are not just for customers; back-end operations can also benefit from them. They are especially key when banks are looking to leverage the massive amount of data they have collected over time to predict the next best course of action where business development or marketing are concerned, for example.
Blockchain
While blockchain frameworks are most often associated with cryptocurrencies in the public consciousness, they have several other revolutionary applications due to their unique properties. As decentralized, chronological databases that can only be altered through regimented steps, blockchains can keep accurate and secure transaction records.
The applications of blockchain for online banking are multiple and could have a variety of beneficial outcomes, but all come back to the key issue of cost reduction for banks as well as their customers. Blockchain’s possible uses could involve core bank transactions, but they also offer several easier-to-implement advantages that digitally savvy financial institutions would not want to pass on.
APIs
Personalizing and automating processes are crucial to the evolution of the banking sector, pandemic times or not. According to the Canadian Bankers Association, partnerships between fintech companies and banks represent a significant part of recent banking technology innovations in Canada. Tools developed by smaller, agile companies are key to modernizing the world of banking and attracting new customers by offering novel, timely services.
Fintech startups can efficiently collaborate with banks by leveraging another current digital banking trend: APIs. These tools help institutions offer more diverse services and experiment with new personalized offerings for their clients.
Conclusion
We speak from experience when we say that, during the pandemic, entrepreneurs have an increased need for information about, and easy ways to apply for, government funding. It is reasonable to assume they will need digestible information about funding when they look to reopen their businesses, or as economic sectors begin to pick up speed post-pandemic.
As a company, we find that an ever-growing number of entrepreneurs and other commercial banking customers look to their financial institution for support with government funding. Traditional banks can meet these new expectations better with appropriate digital banking tools – like those we develop at Fundica.
The biggest digital banking trends of 2021 and beyond will share some key characteristics: they will enable closer connections and offer personalized services to both individual and commercial clients. They will also greatly simplify the user experience by moving it online and automating it. While this change was accelerated by the global pandemic that suddenly forced countless industries and workers to cease in-person activities at once, certain expectations will remain once branches reopen. Customers will continue to seek out these personalized experiences, and the convenience of digital banking products and services, far beyond 2021.
Read more: “The Banking War is On”
To learn more about Fundica and the digital solutions we offer to financial institutions and professionals, contact Tom Poitras, VP of Business Development, at tom@fundica.com or request a demo.